Jersey Economic Substance Requirements

To establish if the Jersey economic substance test (the "Test") may apply to any specific entity for a financial period commencing on or after 1 January 2019 (a "relevant period"), please answer the questions in the panel below.

This substance tool has been developed in connection with the Taxation (Companies – Economic Substance) (Jersey) Law 2019 (the "Law"), as amended and the guidance published as of 22 November 2019.

It is therefore subject to any changes, further guidance, the form of corporate tax return and any supporting substance legislation being published.

It is also intended only to be used as a quick reference guide and should therefore not be relied upon as a substitute for legal advice. For advice on any specific circumstances, please contact a member of our Jersey taxation and economic substance team.


Is the entity a company (whether or not incorporated in Jersey)?

Is that company tax resident in Jersey?

The company is a "resident company" for the purpose of the Law. Has that resident company carried on any relevant activity in the relevant period?

Click on the boxes below for a summary definition of each relevant activity.


    "Banking business" means a deposit taking business which the resident company must be registered to carry on under the Banking Business (Jersey) Law 1991.


    "Distribution and service centre business" means the business of (a) purchasing parts, materials or goods from foreign connected persons and reselling them and/or (b) providing services to foreign connected persons in connection with the business.


    "Finance and leasing business" means the business of providing credit facilities or financing of any kind for consideration. The definition is therefore wide and will include hire purchase agreements, finance leasing, conditional sale or credit sale arrangements intra-group interest-bearing loans and other forms of financing or financial products if they provide a form of credit for a return over and above the initial capital (for example Shari’ah compliant lending structures where there is a premium on the price of an asset).


    "Fund management business" is a technical definition and specific advice should be sought. In summary though, this refers to (a) managers or investment managers required to hold a permit under the Collective Investment Funds (Jersey) Law 1988 ("CIF"); (b) managers, investment managers and trustees/partners appointed as managers required to be registered under the Financial Services (Jersey) Law 1998 ("FSJL") to carry on fund services business; (c) persons excluded from being registered for carrying on fund services business by certain provisions of the FSJL; and (d) persons the equivalent of (b) or (c) above in respect of a fund which would be a collective investment fund for CIF purposes except that the offer of units is not to the public.


    "Headquarters business" means the business of providing certain services to one or more foreign connected persons of the resident company, including (a) the provision of senior management; (b) the assumption or control of material risk for activities carried out by, or assets owned by, any of those connected persons; and (c) the provision of substantive advice in connection with the assumption or control of risk referred to in paragraph (b).


    "Holding company business" refers to a resident company which acts as a holding body (i.e. control another body corporate), has as its primary function the acquisition and holding of shares or equitable interests in other companies and does not carry on any commercial activity (i.e. activity, not passively holding investments, in pursuit of profit). It should therefore apply primarily to SPV resident companies that hold controlling interests in other companies and do not actively carry on any other business for profit.


    "Insurance business" means long-term business or general business within the meaning of the Insurance Business (Jersey) Law 1996, which the resident company must be authorised to carry on by a category A permit or category B permit under that law. 


    "Intellectual property holding business" means the business of holding intellectual property assets, including copyright, patents, trade marks, brand, and technical know-how from which identifiable income such as royalties or fees accrues to the business. Please note that specific provisions apply under the Law for a "high risk IP company", which carries on such business without having created the intellectual property itself.


    "Shipping business" means certain activities involving the operation of a ship anywhere in the world other than solely between Jersey and Guernsey or within the territorial waters of Jersey, including transporting goods by sea (or chartering ships for such purpose), selling tickets for travel by sea, the use, maintenance or rental of shipping containers, and the management of the crew of a ship.

Has that relevant activity generated gross income in the relevant period?